The Impact of a Change in Legal Organisational Form on the Contractual Penalty Agreed in the Partnership Agreement

An agreement on a contractual penalty that the former partners—now shareholders—inserted as a formal clause in the company’s articles of association remains valid after the company is transformed into a joint-stock company, even though the clause is no longer reproduced in the statute. Such an agreement would bind the parties even if it had never been included in the articles of association; its incorporation was merely formal, and its effectiveness extends beyond the articles of themselves. Because the penalty clause is merely a formal component of the articles of association, it is not constitutively bound by it, in terms of its formation, content and termination. The shareholders’ rules, which do not prohibit parallel obligation agreements between shareholders, also allow the same. Therefore, this relationship between the former partners, now shareholders, continues. Although the scope of autonomous regulation in a company’s statute is narrower under stock-company law than under the law of limited-liability companies (the principle of statutory strictness), stockcomänzende Nebenabreden). Such agreements can be included as a formal component in the text of the statute, or they can be agreed and concluded without being included in the statute, i.e. "outside the statute”. In either case they are binding only on those who agreed on them, and are assessed under the general law of obligations.

Key words: limited liability company, joint stock company, statutory transformation, partnership agreement, statute, contractual penalty.